China economy is at a crossroads

The globalization, that was the strength of the Chinese economy, reflected their negative effects on Beijing. The negative trend of Western economies, which constitute the main market for Chinese goods, forced to revise growth estimates By lowering by half, from 8% to 7.5%, the expected growth. Is then pulled down the psychological barrier of the fateful 8% growth, value held firm throughout the past decade. Half a point less for a giant like China means a lot, Beijing will have to give up projects in various fields and especially may have to deal with a growing protests, social factor that already very concerned about the Chinese leadership, as well as to have allocated 85 billion euros, an increase of 11, 5% over the previous year, the sum to be allocated to police forces to prevent and contain the unrest. It is estimated that every day in China there are about 246 riot, due in most part, is the corruption of officials and the great inequality that the great economic growth has generated. One reason identified by the Party leadership is purely economic in nature and the high rate of inflation, negative symptoms common to the Western market economies, because of that the intentions of the Chinese leaders are to contain inflation by 4% Chinese, Thanks to a careful policy that strictly controls the level of prices reached a targeted offer credit. This should prevent a financial crisis, thanks to the desire to maintain a stable exchange rate and the containment of the cost of real estate. This last action is necessary to cover two fronts: avoiding speculative bubbles in real estate type and meet the demand of the population, a topic that was often the source of protests and demonstrations. The central government has finally recognized the problem of local governments, often with their mismanagement are a source of social instability, which can create dangerous and potential contagion from the periphery to the center of the empire, also because the phenomenon of corruption of local organizations is closely connected with the high public debt to its own local government. On this subject, in turn, trigger issues affecting Chinese financial data as a whole, because the download center on local government debt relative to the massive infrastructure construction, which featured heavily on the overall GDP. Construction contracts for infrastructure management cascading generating corruption by closing the circle of the general problem that plagues both the state as a whole, is the concern for civil disorder and social stability of the central bodies. For these reasons, Beijing has said to increase the inspection activity at the local government to combat and prevent the rampant corruption. In any case, the problem of debt is estimated at around 1,300 billion euros divided into several administrations managing the vast territory of China, is a problem that sooner or later because Beijing will face alters the fundamental values ​​of the Chinese economy, on which risk have a devastating impact. All these factors taken together show that, for the Chinese economy has perhaps reached a crucial moment, to reduce the state’s participation in enterprises. According to several economists only by entering into the system, large doses of a market economy, with increased competition and the internal market, China will resume growth in two zeros. However, these choices can not be done except in a context of increased political freedom, necessary to provide the necessary maneuvering space for this address. In this respect the Chinese system is not yet ready to make allowances for power and to loosen the rigid control on society, which is why China risks a kind of an incomplete transition to large industrial country, without the recognition of civil unions and predict greater liberalization of the economy is only a hypothesis at school that will never come to fruition.